Strategies and advice for businesses to stay in control through COVID-19 and get ahead of the pack

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COVID-19 Business Continuity – 9th April

I’m here with the COVID-19 Business Continuity update for Thursday, 9th April.

In today’s briefing:
1. Invoicing best practice during COVID-19
2. Accessing finance to pay wages

1. Invoicing best practice during COVID-19

In smaller businesses, it’s very common for revenue and COGS to be lumpy because work is often only invoiced at the full completion of a job, usually long after the costs have been incurred.
As the current business environment is constantly changing, it would be a good time to reconsider the timing of your invoices.

It is good business practice to clear out your work in progress by the end of the month. By that we mean, issue invoices for the work you have rightfully done the work in the month. For example; if you have a project that spans March and April, it would be practical at this time to issue an invoice for the March component of the work you have completed.

If you think there will be concern from your client about receiving an invoice earlier than they had expected, you could look to extend terms of payment (e.g. extend from 14 days to 30 days, or 7 days to 37 days for good clients).

By reflecting the income in the same month as the costs were incurred, it will serve to give a more accurate picture of monthly revenue. In some cases, it may provide you with a clearer view of your eligibility for JobKeeper payments.

 

Your Tenfold business coaching mentor will be able to help you work out the practicalities of invoicing during this time.

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2. Accessing finance to pay wages

Several businesses are going to be a bit stretched to pay wages before the Boosting Cash Flow for Employers and JobKeeper payments start coming in.

The government has been very clear that they expect banks to come to the party with financial support. In his press conference on Friday 3 April, PM Scott Morrison went as far as to describe the JobKeeper program as “an absolute guarantee you can take to the bank”.

“Because those payments will be made for each of those employees and that should enable them to put a facility in place with their bank so they can make those payments to their employees,” Mr Morrison said. See the PM’s briefing here: https://www.pm.gov.au/media/press-conference-australian-parliament-house-act-030420

The recommendation is to contact your bank and provide your copy of registration for JobKeeper and your financial reports that show eligibility for JobKeeper and Boosting Cash Flow for Employers. Your bank may request to see a list of expenses such as wages and rent so it would be sensible to have them ready. Your Tenfold business coach can assist you to prepare.

From what we understand from our contacts in the finance industry, each bank is handling applications differently. Be prepared and be persistent.

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Coming up next week:
More detail on what the mandatory lease code could mean for your business
A guide for your employees to assist them to manage their personal finances
Resourcing your business in the event that your team members need to take care of school-aged children
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I want to take a moment to acknowledge all the work you are doing as leaders to guide your teams through this. Well done, keep going – it won’t always be like this.

Wishing you and your family a safe and happy Easter.

Ash

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